Last week we covered what’s going on with inflation, and why it’s so high right now. We also covered the importance of making sure that inflation doesn’t have a negative impact on your retirement. Since inflation is often underestimated when it comes to your retirement, I wanted to discuss 4 strategies that you could use to make sure that you have a comfortable retirement for 3 plus decades, without having to cut back in significant ways later on in your…
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What is inflation, and why is it so high right now?
Inflation is one of the biggest risks when it comes to your retirement. Why is that? Because if inflation is too high (in proportion to your investment returns), then inflation will eat away at something called your purchasing power. So over time, your purchasing power will decrease, year over year, ever so slightly. But over time, and especially 2-3 decades, you will feel it in your budget. In simple terms, the hundred dollars you own today has more worth than…
Annuities 101 + Pros and Cons As An Income Stream
Before we get started, let me state that this post on annuities will be general in nature, and will not cover every single detail of them. They are simply too complex to cover everything in this post. Also: I am NOT recommending them. And you should absolutely work with an independent, objective financial professional (who won’t receive a commission from a sale) to discuss whether one of these products is right for you. With that out of the way, the…
3 Ways To Create A Retirement Paycheck
Using Dynamic Distributions For Your Retirement Income As we’ve been discussing in our series of retirement income, there are so many different ways that you can generate income in retirement. You have annuities, reverse mortgages, rental real estate and things like the 4% rule which govern how you can distribute money from your traditional stock/bond portfolio. Today, I want to cover additional strategies that will give you guidance on how much money you can take from your investment portfolio. Last…
Should You Use The 4% Rule To Create An Income In Retirement?
Most people have two major concerns about their retirement – whether they have saved enough and running out of funds. Planning ahead of time is essential when it comes to the amount of money you have in your retirement fund when the time comes. But, it’s equally important to plan your withdrawals ahead of time to make sure you’re not going through your funds too quickly. While figuring out how much to withdraw can seem overwhelming, tools like the 4%…
Pros and Cons of Rental Real Estate Income In Retirement
As you can imagine, it’s really impossible for me to give recommendations on what you specifically should do, especially when we get into the details of your retirement income. So what I’m going to do today is talk about something that I get asked about often, which is: Should we keep, or sell, our rental real estate in retirement? In today’s post, I’ll go through the pros and cons of having rental real estate as a way to generate income…
Should I Get a Reverse Mortgage In Retirement?
We are continuing our series on retirement income. One method that is often discussed, and draws really strong opinions, is getting a reverse mortgage. While reverse mortgages can be helpful, they can also be risky. Before you decide to get a reverse mortgage, it is important to understand exactly what you are getting into and how it can affect your financial future. What Is a Reverse Mortgage Reverse mortgages are essentially a type of cash-out refinancing, allowing you to turn…
Want a 1 Page Financial Plan?
I was at the gym today climbing some stairs (my favorite exercise) with 10 different TV channels (mostly news) all talking about the state of the world in the country. Depending on where you looked, you could get a completely different snapshot of the world, of what’s important and what’s not. The world we live in simply has a lot of noise, and it’s hard to know what to focus on and what to ignore. Sadly, it’s the same way…
5 Expenses That Could Go Down In Retirement
So far in our series on retirement expenses, we’ve discussed the retirement smile, which researchers discovered after analyzing thousands of retired families and tracking their expenses. We learned that on average, the typical retired family has three different stages of spending in retirement, and we also learned that retirement expenses typically go down, when adjusted for inflation, on an overall basis. Our most recent blog was on the top 5 expenses in retirement, and even some expenses that may go…
5 Biggest Expenses In Retirement
One of the most common misconceptions about retirement people have is that they’ll be spending as much in retirement as they were before. As I detailed previously, retirement spending goes down on an inflation-adjusted basis by 1% per year. That said, how do retirees spend their money? In today’s post, we are going to discuss the 5 biggest retiree expenses. TRAVEL Travel expenses may quickly add up in retirement, especially in the early years (aka the go-go years). You’ll suddenly…